Cary Spivak
September 25, 2008

A Maryland bank scored a major victory in a mortgage lending case Wednesday when a federal appellate court rejected class-action status for a Cedarburg couple's suit against Chevy Chase Bank. In a 2-1 decision, the 7th Circuit U.S. Court of Appeals in Chicago reversed a 2007 ruling by U.S. District Court Judge Lynn Adelman, who granted the suit class-action status -- a certification that could have resulted in the rescission of more than 8,000 mortgages at a cost of more than $200 million to the giant Maryland bank.

Left standing is Adelman's ruling that the bank violated the Truth-in-Lending Act by not clearly disclosing the terms of the adjustable rate mortgage it wrote to Bryan and Susan Andrews in 2004. The Andrewses said they thought their interest rate was frozen at 1.95% for five years, when actually only their payments -- not the rate -- was fixed for that period.

They can still pursue a rescission of their mortgage -- having their loan revoked and all of their fees and interest payments returned. Other Chevy Chase clients in the same bind, however, cannot receive the same relief unless they file and win their own legal action.

Read More Here:
http://www.instituteforlegalreform.com/media/displayarticle.cfm?artId=ILLI1730015353

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